First Solar jumps ahead of the pack as tariffs hinder competition

President Donald Trump's new tariff on imported solar equipment has provided a golden opportunity for the Tempe, Arizona-based thin-film solar manufacturer First Solar.

Tariffs on solar components have not helped to increase jobs in the industry.

Scion Corporation

Instead of going with the trend toward crystalline-silicon photovoltaics, a number of years ago, First Solar banked on cadmium-telluride solar technology, and low-and-behold, this one move has paid off big time for the company when these products were left out of the 30 percent tariff on imported crystalline-silicon PV cells and modules.

With a share of 5.1 percent of worldwide PV production, cadmium-telluride (CdTe) technology accounted for more than half of the thin film market in 2013. A prominent manufacturer of CdTe thin film technology just happens to be First Solar.

"First Solar has been the beneficiary of its own ingenuity, as well as a broader policy environment that has rewarded the improvements it made to its technologies," said MJ Shiao, head of Americas at GTM Research. "It's one of the most innovative, business-savvy companies out there, as well as one of the luckiest."

First Solar is developing a road map to drastically increase its production capacity.

First Solar

In looking a little closer at First Solar's latest earnings report last week, the company locked down a record 7.7 gigawatts-DC of net bookings last year. And so far in the first quarter of 2018 – through February 22 – it is reporting another 1.3 GW in bookings, bringing the total to a stunning 9.1 GW-DC.

A vast majority of the 7.7 GW of bookings in 2017 were in the U.S. because competitors couldn't guarantee tariff-free pricing. And First Solar is well aware that the tariffs will last for a limited time, dropping to 20 percent in 2020. And another worry for the company is foreign companies setting down roots in the U.S. to avoid the tariffs.

It is expected that it will take three years to ship the company's current backlog - even with ramping up manufacturing capacity for its new, larger format Series 6 product, both in Ohio and overseas. And we must not forget the recent groundbreaking for the solar-battery peak power plant in Arizona and a sizable power plant in the tough-to-crack Georgia market.

The Trump administration approved protective tariffs of up to 50% on imported solar panels and washing machines to protect domestic producers

Joshua Blanchard, GETTY/AFP

Not everyone is doing as well as First Solarr

According to Solar Power World, despite President Trump’s comments that the United States is “reopening plants that have been closed for a long time,” no new or abandoned solar facilities have started operations.

A week after President Trump announced the tariffs on solar products, China's JinkoSolar did indicate it was opening a new plant in the U.S. JinkoSolar said in a statement on January 30, that its board of directors had given the go-ahead to "finalize planning for the construction of an advanced solar manufacturing facility in the U.S."

However, as of Monday, nothing has been officially confirmed, not even the location. Only two companies, Oregon-based SolarWorld Americas and Texas-based Mission Solar, are hiring back employees who had been laid off over the tariff announcement.

Enel Green Energy's "Stillwater" solar power plant in the United States.

Enel Green Energy

San Jose, California-based SunPower plans to reduce its non-manufacturing workforce by 150 to 250 employees by 2019 because American projects are seen as “uneconomical” now with the tariffs. And this is sad, to say the least. The American energy company designs and manufactures crystalline silicon photovoltaic cells and solar panels based on an all-back-contact solar cell invented at Stanford University.

SunPower has already announced it has stopped a planned $20 million investment in manufacturing, which led to the loss of hundreds of new manufacturing jobs, most within Texas and California.